Can Congress Figure Out How To Rescue The Post Office?

U.S. Postal Service letter carrier Jamesa Euler delivers mail in the rain in Atlanta in February.

David Goldman
/ AP

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Originally published on August 8, 2013 4:56 pm

The U.S. Postal Service lost some $16 billion last year and continues to bleed red ink. Congress has been unable to agree on a rescue plan.

The latest proposal would allow the post office to end Saturday delivery in a year and enable it to ship wine and beer.

The Postal Service's woes are familiar: People don't really send letters anymore, so first-class mail is down, and Congress makes the post office prepay future retiree benefits to the tune of $5.5 billion a year.

Democratic Sen. Tom Carper of Delaware says the Postal Service is on the verge of financial collapse.

"The Postal Service can't continue to bleed money, to run up its tab at the Treasury," says Carper, who heads the Senate panel with oversight of the Postal Service. "The Postal Service owes more than $15 billion to the Treasury — and the ticker's still running."

Plus, he says, there are "7 or 8 million jobs in the country that depend on a strong, viable Postal Service. And this is one that can be fixed."

Carper's fix? The Postal Reform Act, co-sponsored with the panel's top Republican, Sen. Tom Coburn of Oklahoma. The measure would allow the post office to eliminate Saturday service in a year, and to reduce the number of mail-processing centers in two years. It would also allow the post office to ship alcoholic beverages, opening up a new revenue stream, and to reduce somewhat the pension prepayments.

Carper says the Postal Service suffers from too much capacity and too many workers, just like the auto industry used to.

"What they've done is they have right-sized their enterprise," he says of the carmakers. He says the Postal Service needs to do the same.

"They don't have the kind of market share that they used to have," he says. "First-class mail volume has continued to drop. That's where they've made their money over the years."

Coincidentally, the post office unveiled some new stamps Thursday, commemorating American workers. Postmaster General Patrick Donahoe used the occasion to praise postal workers.

"Our employees do a very good job, and work very hard every day to keep mail moving, keep packages moving, across the country," Donahoe said.

But there are far fewer postal employees than there once were, and under Carper's proposal, there would be fewer still. So the American Postal Workers Union has taken to the airwaves, running an ad urging Congress not to cut employees, but to change the way the Postal Service funds its pension obligations.

The ad says the problem is "a burden no other agency or company bears — a 2006 law that drains $5 billion a year from post office revenue while the Postal Service is forced to overpay billions more into federal accounts."

Greg Bell, vice president of the American Postal Workers Union, says the prefunding of retiree health benefits doesn't make sense.

Bell says the union supports a bill sponsored by Sen. Bernie Sanders, an independent from Vermont, that would end the post office's prefunding requirement but otherwise keep the Postal Service relatively unchanged.

The Senate approved a Postal Service overhaul last year, but the House never acted. Meanwhile, the losses continue to mount.

Carper is optimistic the House will approve its own bill soon, setting the stage for the two chambers to find some middle ground.

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Transcript

AUDIE CORNISH, HOST:

While the government wrestles with the newly successful Fannie and Freddie, it's got the opposite problem over at the U.S. Postal Service. The service lost some $16 billion last year and continues to bleed red ink. Meanwhile, Congress has been unable to agree on a rescue plan. As NPR's Brian Naylor reports, the latest proposal would allow the post office to end Saturday delivery in a year and to ship wine and beer.

BRIAN NAYLOR, BYLINE: The woes of the U.S. Postal Service are familiar: People don't send letters anymore, so first-class mail is down, and Congress makes the post office prepay future retiree benefits to the tune of $5.5 billion a year. Democratic Senator Tom Carper of Delaware says the Postal Service is on the verge of financial collapse.

SENATOR THOMAS CARPER: The Postal Service can't continue to bleed money, to run up its tab at the Treasury. The Postal Service owes more than $15 billion to the Treasury, and the ticker's still running. And again, there are seven or eight million jobs in the country that depend on a strong, viable Postal Service, and this is one that can be fixed.

NAYLOR: Carper chairs the Senate panel with oversight of the Postal Service. His fix: the Postal Reform Act, co-sponsored with the panel's top Republican, Tom Coburn of Oklahoma. The measure would allow the post office to eliminate Saturday service in a year and reduce the number of mail processing centers in two years.

It would also allow the post office to ship alcoholic beverages, opening up a new revenue stream, and it would reduce somewhat the pension prepayments. Carper says the Postal Service suffers from too much capacity and too many workers, just like the auto industry used to.

CARPER: What they've done is they have right-sized their enterprise. What the Postal Service - the situation that they're in, they need to right-size the enterprise. They don't have the kind of market share that they used to have. First-class mail volume has continued to drop. That's where they've made their money over the years.

NAYLOR: Coincidentally, the post office unveiled some new stamps today commemorating American workers. Postmaster General Patrick Donahoe used the occasion to praise postal workers.

PATRICK DONAHOE: Our employees do a very good job and work very hard every day to keep mail moving, keep packages moving across the country.

NAYLOR: But there are far fewer postal employees than there once were, and under Carper's proposal, there would be fewer still. So the American Postal Workers Union has taken to the airwaves, running this ad urging Congress to cut the Postal Service's pension obligations, not employees.

(SOUNDBITE OF AD)

UNIDENTIFIED MAN: The Postal Service is recording financial losses, but not for reasons you might think. The problem? A burden no other agency or company bears: a 2006 law that drains $5 billion a year from post office revenue while the Postal Service is forced to overpay billions more into federal accounts.

NAYLOR: Greg Bell is vice president of the American Postal Workers Union.

GREG BELL: We believe that the number one thing that the Postal Service must do, and that is to eliminate this prefunding of retiree health benefits. It doesn't make sense.

NAYLOR: Bell says the union supports the bill sponsored by Vermont independent Bernie Sanders that would end the post office's prefunding requirement, but otherwise keep the Postal Service relatively unchanged. The Senate approved a Postal Service overhaul last year, but the House never acted. Meanwhile, the lawsuits continue to mount. Carper is optimistic the House will approve its own bill soon, setting the stage for the two chambers to find some middle ground. Brian Naylor, NPR News, Washington. Transcript provided by NPR, Copyright NPR.